How is GST beneficial for the country? How would it help to improve the country's economy?

How is GST beneficial for the country? How would it help to improve the country's economy?

Information 30.08.2017   0 Comments   498  Add to Reading List

Let's say a truck is moving stuff from Delhi to Chennai. It will pass through about 8 states. During that time, it will pay a variety of taxes - octroi, VAT, excise duties and so on. Each source of tax collection is a source of confusion, corruption and delay. By the time the truck arrives at a destination in a couple of weeks, a huge amount of cost is indirectly added to the consumer. Instead of India being a common economy, we are a patchwork of dozens of economies making growth slow, business impossible and corruption high.

This problem has been recognized by the developed economies and all the progressive ones - Sweden, Denmark, Germany, Switzerland, Japan - have moved to a common GST (Goods and Service Tax) to provide a one common window for tax collection. With just one place of collecting taxes, there won't be much delays and corruption. When delays and corruption reduce, economy prospers. The single place for tax collection will drastically improve amount of revenues collected [since it will be much easier to verify who didn't pay] and at the same time help businesses grow. Win-Win.


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